Barnes and Nobel have released the Nook reader as a direct competitor to the Kindle. Here’s why I’m psyched about this. But don’t get too amped about devices because this is a market oriented psyched.

First and most obvious, direct competition is going to lead to lower prices. Even now The Nook at $259 has pushed the Kindle down to the same price: a 13% drop from its July price of $300. Lower prices will lead to adoption by a more main stream consumer base. A larger market will mean better financial incentive for publishers to put eBooks out and thus reinforcing the appeal of an eBook reader. This is the way markets and competition work guys. If you look back you’ll see a similar, albeit slower, progress with music and the iPod. It’s not news. It’s just awesome.

The second interesting development is the more “open source” nature of the eBooks model that Barnes & Noble are going to be operating. They are already supporting their eBooks on other platforms (Blackberry, PCs, even the iPhone) and will support other non-B&N Readers in the future.

Here’s the principle that Amazon, as the first to market, couldn’t commit to: the Reader isn’t where you make your profits. You give away the razors and sell the blades. Or in this case cheap readers that allow users to buy high margin books at 10-15 bucks a pop. This is a tested and proven business model; just go ask Gillett how it’s working for them.

Third point: With the B&N eBooks you can lend them to a friend one time for up to 14 days and while doing so you can’t read the books on your device. It’s essentially closing some of the differentiation gap between physical books and eBooks. I like where their heads are at, but I think the “one loan” deal might be an unneeded constraint that I hope gets repealed.

Finally, this whole thing is huge for small authors. It’s probably not widely known but, with just a little formatting, anyone can publish to Kindle/Amazon. With a larger consumer base and other outlets, I see the contract terms for sales getting much more favorable for authors of all sizes and the tools for formatting getting stream lined.

So am I psyched that Barnes and Nobel released the Nook? Absolutely. Am I going to buy one? Hell no. Not yet anyway.

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posted: 09 October 21
under: Business